It’s with sadness for all involved that GotoCamera has closed its doors after 4.5 years in business. I’ve reviewed GotoCamera several times on this weblog, used the service for monitoring my son when he was a baby, and treasure the pictures and videos it’s given us. I’ve discussed in previous articles the importance of failure to innovation, that we learn most from our failures not our successes, hence this weblog.
I’ve known Varun Arora, the CEO for of GotoCamera, for over a decade and I’ve asked him to share his insights and experiences on his journey with GotoCamera. Varun’s experiences are timely as many telcos are launching so called “Digital Lifestyle” services, CES was full of them.
I’ve structured this article is an interview, where I ask Varun some questions (denoted by A: in bold), he answers (denoted by V:), and we wrap-up with some tips for Telcos’ Digital Lifestyle plans.
A: Would you provide a quick intro to what GotoCamera offered to its customers?
V: GotoCamera was a cloud-based video surveillance service for consumers and SoHo businesses. The service made camera setup VERY easy (no ddns, nat, port forwarding, no static IP). It also recorded and stored snapshots and videos in the cloud, delivered security alerts via SMS, and enabled live access through the Web and mobile apps including iPhone, iPad, and Android. Customers paid US$ 9.95 per camera per month for this.
A: What was the most inspirational application of your service?
V: The obvious application for the service is security and, indeed, the majority of our customers used GotoCamera for home and small business security, since the service could record video and save it offsite into the cloud when motion was detected AND could send an SMS alert and not just an “in-app notification”. The problem with in-app notifications that a number of newer cameras support natively is that these work only with iPhones and Android phones, and only when the customer is not roaming (since many roamers still disable data when roaming) – SMS, on the other hand, also works on feature phones, BlackBerrys, etc.
V: What took us by surprise was the number of people who went out and bought netbooks just for use with GotoCamera – remember, our service worked not just with wifi and IP cameras, but also with simple USB webcams. Customers who’d been bitten by the sheer un-userfriendliness of pre-GotoCamera-IP-cameras wanted to have nothing to do with wifi cameras and actually strung up webcams with USB extensions all over their homes. When a customer spends hundreds of dollars more on equipment, just so he can use your service, you know you’re on to something. We received several emails from customers telling us how our service helped catch burglars, saved the lives of their pets, and gave them peace-of-mind by being able to keep an eye on elderly parents – these drove us to excel.
A: Who were your customers and why did they buy your service?
V: At the time we closed down, we had free customers from over 180 countries and paying customers from over 60 countries, predominantly North America and Europe. Our customers were mostly non-technical “everyday people”, NOT the typical profile of readers of this blog but, actually, the typical profile of the CUSTOMERS of the readers of this blog. People looking to solve a monitoring / security problem, reliably, affordability, and without tearing their hair out in the process.
A: What are your 3 biggest successes with GotoCamera?
V: We built a service that could be set up by anyone in under a minute, that could be used on any mobile phone and browser anywhere in the world, and that met most needs of most people. When we announced our closure, PAYING customers offered to pay MORE for the service – that, I think, speaks for itself. Apart from the peace of mind we delivered to customers around the world, we had a number of camera companies that conducted a TON of technical due diligence and incorporated GotoCamera into their firmware, using GotoCamera as a differentiator, so the product certainly appealed to the hardware industry. And finally, at least 4 telcos in Asia and Europe were ready to take on the service, particularly since the system was designed as a platform, ready to add on other home automation and control devices as that market matured, so the overall value proposition rang true with the telcos too.
A: What were your 3 biggest mistakes with GotoCamera?
V: Under-pricing: Initially, we thought the “right” price for the service was $4.99 per month. We later revised this $9.99 and saw almost no drop-off. Clearly, we were massively under-pricing the service. What carriers must understand is that “security” is not just another value added service. It doesn’t need to be priced at “typical VAS” levels. If someone needs security, $10 – 20 a month is not a big ask. As an industry, we must shake off our fears and realize that we’re leaving money on the table.
V: The second and third are inter-related: We raised too little money and, as a result, couldn’t hire the best people. This led to our validating the opportunity for new entrants and allowed them to catch up to us. If I were to do it again, I’d raise significantly more money earlier in the game, hire seriously good people, and move FAST.
(A: Normally I advise start-ups to prove there’s a market not just an idea, so they get a good valuation based on a solid business plan and execute fast. Part of the challenge Varun faced was the time it took to prove beyond reasonable doubt the market was there for their value proposition to the addressable investors. Note raising cash outside the US is not easy, often initial interest was dashed after the US investor realized GotoCamera was based in Singapore. A learning point is with such service propositions where speed of execution is key is to plan on moving to the Bay Area to raise the round necessary to execute, which given the delays in US visa processing needs to be considered very early in the company’s planning.
A: On the point Varun raises on people, this too is critical, the team must be experienced, this is no the time to work things out from first principles, its about execution and already having the contacts and credibility.)
A: What are your customers’ biggest frustrations in using WiFi Camera
V: Difficulties with setup: IP cameras typically require the user to know how to configure his router for DDNS, NAT, port forwarding… the average consumer doesn’t know he has a “router” and thinks of it as “the Internet box”, so this can be a huge stumbling block.
V: Different apps for different brands: a number of cameras now come with their own mobile apps. Unfortunately, each brand has its own mobile app. So either the user commits to one particular brand of camera or must install different apps for each camera and must switch between these apps. What makes matters worse is that sometimes you can have different apps for different models within the same brand.
V: Frequent UPnP / NAT traversal failures: newer cameras come with NAT traversal plug-and-play capabilities. Frankly, it’s not so much plug and play as it’s plug and pray. Even if you do get the camera working, it can frequently “disappear”. NAT traversal is getting better, but it still has some way to go, and a server-relay fallback option is a must.
V: No mobile alerts: some of the newer cameras support motion detection push notifications… but these only work with iPhones and Android devices. If you’re using a Windows Phone, a BlackBerry, or a feature phone, you’re totally out of luck. Speaking of which, most cameras come with iPhone apps, some support Android too, but, again, if you’re using a Windows Phone, a BlackBerry, or a feature phone, the consumer can say goodbye to ANY form of mobile access (especially if it’s traversal-based).
V: No offsite storage: All cameras I’ve come across support FTP. But ask yourself this: who has an FTP account? Which means, if you want offsite storage, you’re basically out of luck.
V: All these are the issues GotoCamera addressed: easy setup, single app across camera brands, relay-based serving, universal text alerts, and offsite recording, all at an affordable price.
A: What go to market recommendations would you offer to Telcos?
V: First, the opportunity in video surveillance is significant and ripe. Nortel (RIP) and Harris Interactive ran a study in 2009 across 9 countries including the US and Canada, and countries in Europe and Asia, and home surveillance emerged as the #1 service that broadband customers wanted from their carriers across ALL 9 countries. This is an opportunity that is waiting to be tapped and carriers should address immediately.
V: Second, your typical VAS consumers are NOT your target market for the security service. You’ll typically be looking at a higher income group for this service. This means there’s a good opportunity for healthy margins – our studies showed that $10 per month for 1 camera (and possibly $15 per month for 2 cameras) is a price point customers are very willing to pay. If you’ve “typically” priced a VAS at $5 / E5, it doesn’t follow that the security service also needs to be priced at the same point.
V: Third, don’t try and address every security need – that’s not your business. Look at addressing the average need of the average consumer. Once that’s addressed, build on it, add features, and charge differentially for the features. An example would be analytics – the base service could include recording, the advanced service ($1 extra pm?) could include the ability to review recordings with automatic server-side searches (e.g. “show me only those recordings where something changed in this quadrant of the video”).
V: Fourth, give the consumer choice. Look at offering a combination of indoor and outdoor cameras, pan / tilt and stationary cameras.
V: And finally, see if you can take the “router subsidy / phone subsidy” contractual model to the camera business. Instead of charing the consumer $100 for a camera up-front, charge him $5 over 24 months. You’ll earn more, show immediate differentiation, and lock the customer in for a 2-year period.
A: Is the Consumer Electronics market able to work with service providers?
V: That’s a loaded question. 😉 If you’d asked me a few years ago, I’d have said a flat “no”. Telecom service providers are, by definition, in the services business. Consumer electronics companies WERE in the “make-it-and-ship-it” or even “brand-it-and-ship-it” business. Today, the line is blurring. Is Apple a hardware company or a services company? It’s both. Sony has the Play Station Network. Microsoft sells the XBox and runs the XBox network. D-Link runs myDlink, which can be expected to morph into a subscription service. The very real fear of over-the-top services is forcing carriers towards services and service enabling (Joyn) and hardware companies towards services. Both sides have a lot to offer each other. So I think it isn’t so much a question of “are they able to work with each other” but “do they have a choice?”
A: What parting advice would you give to Telcos launching Digital Lifestyle services today?
V: My key concern is the “all-things-to-all-people approach”. Let me explain.
V: Unfortunately, too many folks get carried away by what’s possible, instead of focusing on what’s profitably deliverable. “Let’s offer everything that’s Digital Lifestyle: complete home automation, door and window sensors, lighting control, HVAC control, home entertainment control, blood sugar monitoring, heck, let’s throw in a robot that cleans up after the dog should an “accident” occur… and it’ll all be controlled through this $500 touch panel and this $250 control box, with installation that’ll cost $1,000…” That’s overkill.
V: All the conversations I’ve had with carriers that have experimented with full home automation indicate that most markets aren’t quite ready for this yet. One carrier went so far as to call them “halo projects” – services that are offered purely for the PR value, knowing that the market isn’t quite ready and that the service will likely lose money. Now that’s fine if that’s the intended strategy.
V: But if you want to build a service with stickiness and meaningful revenue, start with the low hanging fruit – in Europe (which tends to be more energy conscious), this is energy monitoring and home video surveillance. In most other parts of the world, for now, it’s just home video surveillance. Even with video surveillance, trying to be everything to everyone is a guaranteed recipe for failure – HD streaming and 24×7 offsite recording are NOT feasible with today’s technology. Consumer home upstream bandwidth (over DSL and standard cable Internet) cannot support high definition recording. The amount of storage required for 24×7 continuous video, even at SD quality, is stupendous – 1 minute of H264 at 640×480, even at 10 fps, can easily exceed 10 MB. 24 hours of this and you’re looking at serious storage requirements.
V: Assuming you’re running a FIFO model with just a day’s continuous storage (which is, frankly, useless as it may be several days before the home owner realizes something’s missing… by which time the video’s long gone…), you’re looking at serious processing and I/O overheads, saturated uplinks, and serious network design issues. You’re certainly NOT looking at an affordable consumer price point. At GotoCamera, we offered consumers the ability to record 10 seconds of video per minute OR to record video only when movement occurred. The vast majority chose to record only when movement occurred. Using the cloud as a virtual DVR is a non-starter. If someone needs 24×7 video, ask him to talk to ADT.
Top Tips for Telco Security and Monitoring Services
- Security is not SMS: it doesn’t need to be priced at SMS VAS levels.
- Give customers choice: offering just 1 camera model will lead to dissatisfaction down the line AND will make you overly dependent on the camera company.
- Don’t try to be everything to everybody: you’re a carrier, not a security company. Leave professional security fulfillment to the professional security companies.
- Remember: not all your customers are using iPhones and Android devices. Many of your high end customers – and those who’re in the target market for security services – use BlackBerrys, Windows Phone and feature phones. iPhone / Android-only services are a non-starter.
- Home automation has been “around the corner” for the last 10 years… it’s still around the corner. Start with the low-hanging fruit, and try and adopt a service that can evolve into a platform as consumer needs mature.
And a final plug for Varun Arora, his hard won experiences are available to service providers in putting together meaningful Digital Lifestyle services. Check out Varun’s Linkedin profile to contact him.